Friday, 28 September 2012

Das Kapital

Recent Malaysia Budget 2013 is
basically a continuation of the practice over the past few years; Malaysian
Prime Minister Najib Razak pledged to boost help for the poor to cushion the
impact of inflation by promising it'll reduce the impact of rising costs on
Malaysians.

Our poverty level looks good on paper but woefully ignores reality. Statistics are supposed to accurately measure our economic
environment, so that in this case, pin-point policies to deal with
poverty can be crafted.An income that is necessary to buy a group of foods that would meet the
nutritional needs of the members of a household. The income is also to
meet other basic necessities such as clothing, rent, fuel and utilities,
transport and communications, medical expenses, education and
recreation.

Take a quick glance at Job
Street’s salary report a fresh graduate is only able to earn about RM2500 per
month. With living costs having risen exponentially in recent years, how are we
expected to take out a decent living with these figures?

Today considering our public
transportation system is still yet to improve; a fresh graduate must own a
transportation to commute to work. This situation requires Malaysian to choose
between buying a car or a house first, and many have committed to own a car
first. Petrol
costs RM 1.80 per litre and most of the roads are toll roads. It will
cost easily around RM 300 for a average home to office.

It will easily cost them around
two years of their salary to put down deposit for a local car. If we take into
consideration their living expenses and other commitments, it may take them even
longer to settle their car loan. Hence, it has left them with very little option
but to take the maximum car loan financing tenure of nine years.

For young graduate in Malaysia, buying
a car is more expensive both in real terms, and in terms of debt-to-income
ratio due to the purchase price of the car are expensive because of tax . In reality, it means they have to either purchase a car with lower price
tag or commit to a longer term loan to own a car, which cost them the
opportunity of owning a home.

When Malaysian spend a
substantial amount of their salary paying for a car, they are left with little
savings to own a house, and their house affordability level decreases over the
years as prices rise due to inflation.

Unfortunately by the time they
can afford to purchase a home, be it three, five or nine years later, the price
of a property would have escalated due to among other things, inflation, higher
construction cost and higher land prices.

For example, an apartment
today costs roughly about RM250,000 — translating to a R25,000 deposits.
With an average salary of RM3,000, one may perhaps save RM500 per month (after
deducting expenses) and take up to 50 months to save up for an apartment.
That’s 4 years! How would young married couples cope with such costs?

Since most middle-class
Malaysians earn within this average, it’s easy to see how one would be hard-pressed
to afford a house, especially since property prices continue to skyrocket.

While it may be safe to say
that their salary would also increase, generally speaking the increment may not
aligned to the rate of inflation. In most cases, owning a home will be a huge
debt lasting 30 to 40 years of housing loan repayment.It should be in the government’s
vision to ensure that Malaysian is paid well enough to buy a house and feed
themselves. This is not even scratching the surface of the problem as there are
many other Malaysians who earn less than RM3, 000 or even RM1, 500 for that
matter.

Without stringent enforcement and specific policies to reduce income
inequality and increase equality of opportunities, efforts to meet the
2020 target would be futile if not everyone can benefit from the
increased economic growth.

Note:- Das Kapital, by Karl Marx, is a critical analysis of capitalism as political economy, meant to reveal the economic laws of the capitalist mode of production, and how it is the precursor of the socialist mode of production.